is cutting thousands of jobs around the world after the largest privately held company in the US failed to meet its profit targets.
The Minneapolis-based company, the world’s largest agricultural commodities trader, will cut about 5% of its 164,000 workforce as part of its 2030 strategy, according to an internal memo seen by Bloomberg. The reductions will not affect its executive team, according to sources familiar with the matter who asked not to be identified discussing internal matters.
Cargill and grain trading competitors such as and , saw their profits shrink after record harvests that drove down corn and soybean prices. For Cargill, the pressure has been compounded by the smallest U.S. cattle herd in seven decades. The company has spent much of the last decade transforming itself into the third-largest beef processor in the US.
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“The majority of these reductions will occur this year,” CEO Brian Sikes said in the memo. “They will focus on simplifying our organizational structure by removing layers, expanding the scope and responsibilities of our managers, and reducing duplication of work.”
Cargill had already told employees earlier this year that it would reduce the number of business units from five to three, after less than a third of its businesses met their profit targets in fiscal 2024. The company also cut about 200 technology jobs in various locations.
The company’s profits fell to $2.48 billion in the year to the end of May, the lowest since 2015-16, as reported by Javier Blas of Bloomberg Opinion. This represents less than half of the record net profit of around $6.7 billion achieved in the 2021-22 fiscal year.
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“We have presented a clear plan to evolve and strengthen our portfolio by leveraging the compelling trends ahead of us, maximizing our competitiveness and, above all, continuing to serve our customers,” Cargill said in a statement to Bloomberg.
Sikes, 56, took over as CEO early last year, just as his predecessor’s bet on beef began to backfire amid severe pressure on margins. There is still no relief in sight for this part of Cargill’s business. Donnie King, the competitor’s boss, said earlier this month that his company had not yet seen signs that ranchers intend to rebuild herds.
“We need to simplify and streamline our operations, improve the speed and efficiency of our work, manage our costs and capital more competitively, and respond to requests from you and our customers to be an easier company to work with and with ,” Sikes said in the memo. “Cargill may be the most consequential food and agriculture company in the world. And before the end of this decade, we will be.”
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